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Exhibit
99
REGARDING
PROJECTED PROCEEDS FROM THE SALE OF ITS WHOLLY-OWNED
SUBSIDIARY,
FIVE STAR PRODUCTS, INC.
EAST
HANOVER, NJ (December 4, 2009) - National Patent Development Corporation (OTC
Bulletin Board: NPDV.OB) today announced further detail regarding the projected
proceeds to be received from its previously announced sale of all of the issued
and outstanding shares of common stock of its wholly-owned subsidiary, Five Star
Products, Inc., the sole stockholder of Five Star Group, Inc., to The Merit
Group, Inc. pursuant to a Stock Purchase Agreement between the
parties.
National
Patent previously announced that the aggregate
purchase price for the shares of Five Star Products common stock to be sold to
Merit in the sale would be approximately $33 million, subject to certain
adjustments, and that National Patent anticipated that it would receive
approximately $13 million after the required repayment of Five Star’s existing
debt but before any other costs and adjustments. National Patent is
now able to estimate that those costs and adjustments may total between $3.5 and
$4.5 million, and include: payment of transaction costs, an agreed share of any
losses on the sale of certain designated Five Star inventory, severance costs,
certain costs associated with rent owed at Five Star’s Connecticut warehouse,
the satisfaction of certain obligations (if any) under state environmental laws,
and certain other adjustments. All adjustments are more fully
described in the Notice of Special Meeting of Stockholders, and accompanying
proxy statement, which National Patent filed today.
The estimated range of costs and adjustments represents
management of National Patent’s best estimate at this time. Actual
costs and adjustments may vary from this range and such variance may be
material, and National Patent cautions that undue reliance should not be placed
upon this estimate. The sale remains subject to the approval
of the stockholders of National Patent.
Five Star
Products, Inc., a Delaware corporation wholly-owned by National Patent and
headquartered in East Hanover, New Jersey, is engaged in the wholesale
distribution of paint sundry and hardware products in the Northeast and
Middle-Atlantic states with particular strength in the greater New York
metropolitan area. Five Star distributes products to approximately 3,000
independent retail dealers, which include paint stores, independent
hardware stores, lumber yards, and do-it yourself centers. Five Star
distributes a range of private label products sold under the “Five Star” name.
Five Star operates two distribution centers, the primary one located in East
Hanover, New Jersey and another in Newington, Connecticut.
National
Patent Development Corporation, a Delaware corporation headquartered in East
Hanover, New Jersey, owns and operates a home improvement distribution business
through Five Star Products, Inc., and also owns certain other
assets.
The Merit
Group, Inc. a South Carolina corporation headquartered in Spartanburg, South
Carolina, provides wholesale distribution of paint sundry and drywall related
products through its Lancaster, Merit Trade Source and Merit Pro trade names.
The Company’s customers are located throughout the United States, the Caribbean
and Central and South America. The Company services over 10,000
retail locations including leading national, regional and independent paint
chains, home improvement centers, hardware stores, lumber yards and drywall
yards through its seven regional distribution centers. The Company also offers a
broad assortment of paint sundry and drywall related products under its “Merit
Pro” brand.
Important
Information
This
communication may be deemed solicitation material in respect of the transaction
described herein. Because the transaction requires the approval of
the stockholders of National Patent, National Patent anticipates that it will
file with the Securities and Exchange Commission (the “SEC”) a definitive proxy
to be used by National Patent to solicit the approval of its stockholders for
such transaction. YOU ARE URGED TO READ THE PROXY STATEMENT REGARDING THE
TRANSACTION, IF AND WHEN IT BECOMES AVAILABLE, AND ANY OTHER RELEVANT DOCUMENTS
FILED BY NATIONAL PATENT WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO SUCH A PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. You can obtain free copies of any such materials
(including any proxy statement) filed by National Patent with the SEC, as well
as other filings containing information about National Patent, at the SEC’s
Internet Site (http://www.sec.gov). National Patent will also provide
copies of any such proxy statement and other information filed with the SEC to
any stockholder, at the actual cost of reproduction, upon written request to Ira
J. Sobotko, Vice President and Chief Financial Officer of National Patent, at
903 Murray Road, PO Box 1960, East Hanover, New Jersey 07936, or via telephone
at (973) 428-4600. This announcement is not a solicitation of
proxies.
Participants
in Solicitation
National
Patent and its executive officers and directors may be deemed, under SEC rules,
to be participants in the solicitation of proxies from National Patent’s
stockholders with respect to the transaction described
herein. Information regarding the officers and directors of National
Patent is set forth in the definitive proxy statement for National Patent’s 2009
annual meeting of stockholders, which was filed with the SEC on Schedule 14A on
November 18, 2009, and information regarding direct or indirect interests in the
transaction by any officer or director of National Patent, if any, by securities
holdings or otherwise, would be set forth in a definitive proxy statement to be
filed by National Patent with the SEC in the event such a filing were to
occur.
Forward-Looking
Statements
This
press release contains “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S.
Private Securities Litigation Reform Act of 1995, which involve significant
risks and uncertainties. All statements other than statements of
historical fact are statements that could be deemed forward-looking statements,
including statements regarding the ability to complete the transaction
considering the various closing conditions; any statements of expectation or
belief; and any statements of assumptions underlying any of the
foregoing. Investors and security holders are cautioned not to place
undue reliance on these forward-looking statements. Forward-looking
information may be identified by such forward-looking terminology as
“anticipate”, “believe”, “may”, “will”, and similar terms of variations of such
terms. Our forward looking statements, including those relating to consummation
of the sale transaction and satisfaction of the other conditions and
contingencies to the consummation of the sale transaction, are based on our
assumptions, estimates and projections about National Patent and the Five Star
business and involve significant risks and uncertainties, including: the risk
that the transaction will not be consummated; the risk that
conditions and other contingencies to consummation and closing will not
occur; the risk that anticipated benefits from the sale transaction
may not be realized or may take longer to realize than expected; the risk that
estimated or anticipated costs, charges and liabilities to be incurred in
connection with effecting the transaction may differ from or be greater than
anticipated; and the effect of any regulatory approvals or conditions.
Additional information on these and other risks, uncertainties and factors is
included in National Patent’s Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and other documents filed by National
Patent with the SEC. If these or other significant risks and
uncertainties occur, or if our estimates or underlying assumptions prove
inaccurate, actual results could differ materially and consummation of the
transaction may not occur. You are urged to consider all such risks and
uncertainties. In light of the uncertainty inherent in such forward-looking
statements, you should not consider their inclusion to be a representation that
such forward-looking matters will be achieved. National Patent assumes no
obligation to, and does not plan to, update any such forward-looking statements,
other than as required by law.
Contact:
National
Patent Development Corporation
John
Belknap 973-428-4600
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