Mace Security, announced that its final payment was made to its former CEO under a settlement agreement and that the company has secured new short-term financing. In addition, Mace disclosed that it is planning a rights offering for the first half of 2011 to finance its growth in the security industry.
Mace has paid all amounts owed to former CEO Louis Paolino, under the settlement agreement that Paolino and the company had entered into. The second payment of US$2,310,000 owed Paolino under the settlement agreement was paid. As previously disclosed, the company paid Paolino the first payment of $2,300,000. With Mace's final payment under the settlement agreement, all legal actions between Paolino and the company have been dismissed with prejudice and mutual releases between the company and Paolino became effective. As disclosed in the company's filings under the Securities Exchange Act of 1934, as amended, an arbitration panel of the American Arbitration Association awarded Paolino the sum of $4,148,912 as damages and made a supplemental award of $738,835.02 for legal fees in connection with various claims filed by Paolino related to the company's termination of Paolino as the company's CEO. The agreement resolved the Arbitration Awards granted Paolino.
As previously disclosed, the company has been selling its non-core assets, including its remaining car wash facilities, its Texas warehouse and its digital media marketing business to generate funding for the payments which were due under the agreement, and to fund growth of the company's security segment. The company was successful in selling an Arlington, Texas car wash and its digital media marketing business in the fourth quarter of 2010, generating net proceeds of approximately $1.23 million. Two of four remaining car wash facilities are under agreements of sale. Upon closing under the two car wash agreements, the company expects to generate approximately $2.3 million.