Evercel, Inc. - Company Update on Current Operations and Holdings

New York, NY, October 23, 2022 --(PR.com)-- Update on Company Operations – Following the sale of the Company’s equity indirectly held in Printronix Holding Corp. (“Printronix”) in October 2021, the Company had three assets – cash and its two portfolio companies, Zagg Inc. (together with its intermediary entities and operating subsidiaries, “ZAGG”) and Current Technologies, LLC (“Current”). The activities and operations of ZAGG and Current are managed indirectly (as described below) by Corona Park Investment Partners, LLC (“Corona Park”). Corona Park is controlled and managed by Dan Allen, the former CEO and current member of the Board of Directors (the “Board”) of the Company. The following is a summary of the status of the three assets of the company:

A) Cash – The Company has approximately $39 million in cash on its balance sheet. This balance does not reflect a tax provision liability relating to the gain on Current (as described below).
B) ZAGG – In February 2021, the Company invested approximately $39 million in Zigg Holdings, LLC (“Zigg”), a holding company managed by Corona Park, in order to facilitate a take-private transaction of ZAGG. The audit of ZAGG for the fiscal year ended March 31, 2022, has been completed and the results were positive. ZAGG showed profits that were consistent with, or slightly above, budget. ZAGG is projecting fiscal year 2023 EBITDA in excess of fiscal year 2022 results. Based solely on the information received by the Company from Corona Park and Dan Allen, the asset appears to be performing at or above expectations, and the Company continues to be optimistic about the investment.
C) Current – The Company, through Paper Ventures LLC (“PV”) held a 65% membership interest in Current. Corona Park is the sole manager of PV. On July 11, 2022, the Company’s stake was sold to Covalent Group, Inc. The Company has been informed that the return to the Company from the sale is approximately $9 million (less escrow holdback), as compared to the Company’s original $3 million investment made in April 2019. The Company formally requested an explanation for the withholding of monies by PV from the sale and received a response from Dan Allen of Corona Park that it considers inadequate. In that response, Mr. Allen stated that it was within his rights to hold the money in PV in accordance with the terms of the PV LLC agreement.

The Company is continuing, through counsel, to obtain its distribution of the proceeds of the sale of its investment in Current.