FLAME SEAL PRODUCTS, INC. (OTC Pink: FLMP) (PINKSHEETS: FLMP), a leading provider of Specialty Chemicals for the Passive Fire Protection Market, today issues the following update to its Stockholders.
From: The Board of Directors
Subject: June 30, 2014 Progress and Financial Report
Flame Seal achieved its second quarterly profit while gross margins continued to expand. The need to accelerate testing for further product certifications will require additional capital. Expanded margins will translate to stronger profitability as penetration of the spray foam insulation market gains traction.
The Board of Directors
The Board of Directors (BOD) announces as of July 25, 2014 Mike Kiser has resigned, effective immediately, from the Board of Directors of the company. Mr. Kiser will continue to support the company as Chief Science Officer. Mr. Kiser cited time demands related to his continuing recovery from serious illness and other family health issues which also require his attention for the foreseeable future. Bruce Rutherford, Chairman of the Board, said “We have accepted Mike’s resignation from the Board of Directors. We understand that his health and that of his family must take priority. We look forward to his full recovery and his future assistance with the Board when circumstances permit. Mike is responsible for the development of our technology and his continued participation in our R & D programs and other technology efforts is welcome.”
To address the capital constraint, Flame Seal plans to offer in the third quarter a convertible preferred stock issue paying a 5% dividend in cash. The Preferred shares will be offered first to our shareholders, and if not fully subscribed by existing shareholders, to third parties. Proceeds from the issue will be used to increase research and development, secure certifications in new markets, beef up our marketing budget to increase sales and to further repair our balance sheet.
June 30, 2014 Financial Review
Earnings on an Accrual Basis:
For the quarter ending June 30, 2014 Flame Seal reported sales of $445,863 and a profit of $21,630. Revenues continue on plan.
In the one (1) year period commencing July 1, 2013 to June 30, 2014, Flame Seal expanded its gross profit margin 9%. The improvement in profit margin has provided much needed capital to support on-going operations and will ensure continued profitability as we grow our sales.
CEO Craig Keyser states:
“Over the past year we have transformed and stabilized Flame Seal. The company is now in a position to concentrate on improving sales opportunities by obtaining additional product certifications with important suppliers to the spray foam market and other certifications for other key markets. Future growth will require significant operating capital, as well as hiring additional qualified personnel. The objective is to penetrate target markets to develop recurring revenue streams that are supported by knowledgeable and professional staff.”
The balance sheet continues to be burdened by substantial obligations incurred prior to May 2013. Further improvements will take more time and capital, in part, because the BOD decided to devote available cash flow to support sales, marketing programs and new product developments.
-In the June 30, 2014 quarter, our Current Ratio continued to improve to 85% from 79.4% on March 31, 2014.
Cash as of June 30, 2014 was $50,484, a reduction from March 31, 2014’s $219,438 as a comparable amount of short term loans were repaid. The Board of Directors is continuing to provide working capital as needed which illustrates its dedicated commitment to Flame Seal’s future.
Sales and Technology Review
Sales for the June 30, 2014 quarter were $445, 863 continue on a modest pace due to R & D constraints, marketing limitations and the need for multiple certifications and new product testing.
New products launches such as the recently announced Wild Fire initiative and purchase commitments from new customers could significantly boost revenue this year. Management is concentrating on developing long-term customer relationships with steady, recurring order flow.
The Company also is focusing on the expanding Thermal Barrier market as this segment continues to present the opportunity for increased sales. To this end and subject to securing a permanent capital infusion form the planned Preferred Stock Offering, more testing and certifications are planned for 2014. These certifications are absolutely necessary to expand our sales from current levels.
June 30, 2014 financial reports in table form are available on OTC Markets -- www.otcmarkets.com -- under the FLMP symbol.
The content of this release continues to contain repetition of previously released statements. Flame Seal is, also, aware that its website - www.flameseal.com - is not up to date. When more pressing priorities are met, management intends to update it to become an information resource for current and prospective customers and investors, as well as suppliers and the media. Additionally, we reiterate that Flame Seal’s unaudited financial statements are prepared by an independent Certified Public Accountant. Audited statements will be made available when we accumulate adequate surplus and more pressing priorities have been met. The objective is clarity, transparency, consistency and timely factual reporting for our owners, the shareholders.
Respectfully Submitted By the Board of Directors
ABOUT FLAME SEAL
Flame Seal Products, Inc., manufacturer of the world's number one fire prevention technology, was founded in 1992 as a research and development company focused on the investigation and application of passive Fire Prevention Technologies. FLAME SEAL PRODUCTS, INC. (FLMP) began trading its common stock on March 27, 2000. Flame Seal Products, Inc. is also the Transfer Agent of record. The company offers a wide variety of Code Driven solutions for a number of diverse applications and industries, and has developed three passive fire prevention technologies which are the basis for the company's products. For more information, go to: http://flameseal.com
SAFE HARBOR STATEMENT
Certain statements in this release may be "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the Company's ability to meet the terms and conditions required to obtain its project financing, risks and delays associated with product development, risk of market acceptance of new products, risk of technology or product obsolescence, competitive risks, reliance on development partners and the need for additional capital. Flame Seal takes no obligation to update or correct forward-looking statements, and also takes no obligation to update or correct information prepared by third parties that are not paid for by Flame Seal.
Mobile 949-233-3229 – preferred
SOURCE: Flame Seal Products, Inc.