GLOBAL ENERGY GROUP, INC. ANNOUNCES THE PURCHASE OF CONTROLLING INTEREST BY THE CHEROKEE NATION
August 19, 2005
TULSA, Oklahoma -- August 19, 2005—Global Energy Group, Inc. (the
“Company”) (OTCBB:GENG) announced today the closing of the Company’s
acquisition of its exclusive master distributor, Global Energy
Distribution Group (“GEDG”) for approximately 81.7 million shares of
the Company’s common stock. Pursuant to the terms of the acquisition,
CND, L.L.C.(“CND”), an Oklahoma limited liability company wholly-owned
by the Cherokee Nation, acquired approximately 52% of the shares of the
Company’s outstanding common stock, resulting in a change in control of
the Company.
CND is a licensed distributor of the Company’s products and Cherokee
Nation Industries, Inc. (“CNI”), also wholly-owned by the Cherokee
Nation, currently manufacturers the Company’s products. Mr. Jim
Majewski, CEO and President of both CNI and CND, was elected a director
of the Company on May 20, 2005.
Mr. Majewski said, “We have been working with the Company for almost a
year and are very excited to be able utilize CND’s unique position to
assist Global in securing new governmental contracts and related
business.”
“The Cherokee Nation is excited about this new venture to make quality,
environmentally friendly products, bringing jobs and economic
opportunity to the Cherokee Nation,” said Chad Smith, Principal Chief
of the Cherokee Nation. “Quality jobs will help our communities and
keep our culture strong, and the growth of this business will only
strengthen the Cherokee Nation.”
In connection with the transaction, CND was appointed as the trustee of
a voting trust, with the power to vote all of the Company’s outstanding
Series A and Series B Preferred Stock, subject to limited exceptions.
CND’s voting power as trustee of the voting trust, combined with CND’s
common stock ownership, results in CND having 68% voting control of the
Company. In addition, pursuant to the terms of the transaction, (a) the
holders of the Series A and B Preferred Stock forgave approximately
$380,000 of accrued dividends, (b) the mandatory redemption provisions
of the Series A and Series B Preferred Stock were extended to five
years from June 30, 2006 with an annual mandatory redemption of 20% of
the outstanding Preferred Stock, and (c) the Series A and B Preferred
Stock holders cancelled warrants to purchase approximately 53 million
shares of the Company’s Common Stock at prices from $0.10 to $0.30
(with a weighted average exercise price of $0.19).
Global Energy Acquisition Group, L.L.C. (“GEAG”) and its principals,
which possessed 79% voting control of the Company prior to the
transaction, retain ownership of approximately 30% of the common stock
of the Company and 2.8 million shares of the Company's Series B
Preferred, which preferred shares will be voted by CND under a voting
trust. David E. Webb, Chairman of GEAG, said, “We believe that the
involvement of the Cherokee Nation as the controlling shareholder of
the Company will materially enhance the Company’s opportunity to secure
additional business, especially in the governmental market. We look
forward to the leadership of the Cherokee Nation for the Company and
feel privileged to continue to participate as an equity owner.”
Forward-looking statements in this release are made pursuant to the
“safe harbor” provisions of the Private Securities Litigation Act
Reform Act of 1995. Words or phrases like “we believe”, or similar
expressions are intended to identify “forward-looking statements.”
Investors are cautioned that such forward-looking statements involve
risks and uncertainties, including without limitation, inability to
obtain necessary financing, no assurance of acceptance of the Company’s
products in the marketplace, increased levels of competition for the
Company, new products and technological changes developed by others,
the Company’s dependence on third-party suppliers, and other risks
described from time to time in the Company’s periodic reports filed
with the Securities and Exchange Commission.
CONTACT:
Global Energy Group, Inc.
John Bailey (972) 943-6040
MEDIA
CONTACT:
Cherokee Nation
Mike Miller (918) 384-7861
SOURCE:
Global Energy Group, Inc.