Extreme Motorsports of California, Inc. (ETMO.PK) reports that it has completed the acquisition of Southern Offroad Vehicle Services, LLC , a company dedicated to providing financing for customers purchasing off-road vehicles.
Through this acquisition, Extreme will not only be able to offer its customers direct financing of sandcar purchases, but will also be the first sandcar manufacturer to offer leasing options, much like any traditional car dealer.
As previously announced, in exchange for all of the capital stock of SOVS, Extreme has paid $10,000 in cash and 15 million shares of Extreme common stock. Of the 15 million share of common stock, 10 million will be restricted shares of common stock and 5 million will be free-trading shares.
In the past, Extreme required customer down-payments at contract signing and final payment upon acceptance of the final vehicle, which required Extreme to finance the 12-month or more build-out process through the operating cash flow of the company.
Now, Extreme will be able to achieve both greater throughput and profit margins by shifting its financing costs to the customer.
SOVS has currently secured $14 million in financing for future customers of Extreme, both for direct purchases and for leased vehicles. This will provide Extreme with immediate funding for the build-out of custom sandcars for private customers and “spec” vehicles for its dealers.
Please share your thoughts: Extreme Motorsports of California, Inc. Message Board