MISSION VIEJO, Calif.--()--FITT Highway Products, Inc. (OTCBB: FHWY) (the “Company”) announced that it has entered into a settlement agreement with Sacks Motor Sports, Inc. under which the Company will issue Sacks, 4,000,000 of its restricted common shares and Sacks will acknowledge full satisfaction of its previously recorded $1,790,000 judgment against the Company. In connection with the settlement agreement, the Company will record a reduction of its balance sheet debt by approximately $1,700,000 and a gain on extinguishment of debt in of approximately $1,572,000 in its operating statement.
As reported in previous financial statements filed with the SEC, the Company was burdened with substantial debt and has not been able to conduct operations in a normal fashion. The Company believes it will need to compromise its debt at no more than $0.10 per dollar of debt. If successful, we expect we will be able to attract investment, enter into agreements with service providers, and manage our own operating functions.
The Company continues to pursue compromising its debt so that it can execute its business plan. Since 2010, the Company has reduced its balance sheet debt by $3,908,000 (inclusive of the settlement with Sacks Motor Sports, Inc.) either by debt compromise or conversion to equity. It has accomplished this through the issuance of 11,202,256 shares of its common stock and the payment of only $20,500 in cash. Also, in 2011, the Company has issued 4,500,000 shares to its two current employees as consideration for $415,000 of accrued but unpaid wages. Finally, the Company since 2010 has issued 13,720,000 common shares valued at $1,336,000 to service providers in lieu of cash payments for operating services.
About FITT Highway Products, Inc.
FITT Highway Products, Inc. is a brand management Company which is in the process of mitigating its debt in order to effectively pursue its business plan. The Company has entered into an Operating Agreement with F.I.T.T. Energy Products Inc. to perform a majority of its operating services, including among other things, selling, marketing, producing and distributing the " F.I.T.T. Energy For Life " in exchange for a royalty payment as disclosed in its public filings. Please read the public filings for the complete details on the Operating Agreement with FITT.
This document contains “forward-looking statements” related to future events. Forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” plans,” “believes,” “seeks,” or “will.” Forward-looking statements by their nature address matters that are uncertain. Particular uncertainties which could adversely or positively affect our future results include: consumer tastes, availability of production, liquidity, general economic conditions, and the activities of competitors. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.