Distribution Management Services, Inc. Announces Merger and Acquisition of Initial Properties and Assets

ROCHESTER, N.Y., Jan. 19, 2011 /PRNewswire/ -- Distribution Management Services, Inc. (Pink Sheets: DMGM) is pleased to announce that it has completed the first phase of its corporate restructuring and development.

From October 5, 2010 to-date, DMGM has been in the process of a major restructuring program.  The initial phase of the restructuring program (orchestrated by its newly-appointed senior executive officers) required DMGM to re-domesticate itself to Delaware, then, to effect a merger with a newly-formed subsidiary pursuant to Section 251(g) of the General Corporation Law of Delaware.  Randolph S. Hudson, the company's Co-President, Chief Executive Officer, and Acting Chairman of the Board states the primary purpose for the company effecting this type of reorganization.  "As the result of several years of poor performance due to economic issues and our previous lack of adequate levels of working capital, the company fell by the wayside in terms of its fiscal performance and viability.  The 251(g) reorganization permits us to mitigate our risk, specifically, in terms of the company's approximately $18 million in liabilities, and to move forward without the burden of our enormous debt.  Basically, the 251(g) reorganization permits us to leave the debt behind [in our subsidiary] and move forward as a clean, debt-free company."

The next phase of DMGM's development required the company to form and organize a number of subsidiaries.  In order to implement the third phase of its restructuring and development program - its acquisitions - DMGM was required to form and organize a number of subsidiaries to maintain and operate its newly-acquired assets.  DMGM established a number of corporations that are qualified to transact business in California, Oregon, Washington, Arizona, Nevada, Florida, Wyoming, and New York, respectively.

DMGM's management elected to conduct its new business operations in five principal areas, all of which are hospitality-related.  The company is engaging in business in the following six fields: (i) retail restaurant and bar operations, (ii) lodging operations, (iii) adult-themed entertainment and gaming operations, (iv) public and membership golf course operations (and related food, beverage, and clubhouse operations), (v) residential income-producing real estate operations, and (vi) retail and commercial banking activities.  The company's senior executive management view these types of operations as sustainable in this market's economy and during times of recession.

The first acquisition (in a predetermined and scheduled series of acquisitions that will occur over the next three months) by Historic Destinations, Inc. (a DMGM totally-held subsidiary) is that of the Dutch Flat Hotel in Dutch Flat, California.  The property is located in the High Sierras in California and is a popular destination for tourists and locals alike.  It is located minutes from Interstate 80, and is the midway between Sacramento and Lake Tahoe.  The company expects to market the property for the remainder of the winter season by offering packages to skiers in conjunction with the Boreal Ridge and Sugarhouse ski resorts (which arrangements are under negotiation), which are located 25 minutes from the property.  While the property is small (by comparison to larger properties that offer greater accommodations), the company's pricing and occupancy structure is such as to provide the company with significant net income.  During spring and summer, the tourist population has supported the hotel, as tourism in the Dutch Flat-area is substantial.  It is the belief of company management that smaller, historic destination locations are becoming ever-popular for families seeking getaways from larger, urban areas, particularly those with historic influence.

The company's second acquisition is that of the Longhorn Steakhouse in Tuolumne, California.  The Longhorn has long been well regarded as the finest restaurant and bar in Tuolumne.  The restaurant is located off of the major California Route 149 in Tuolumne, and has been the primary stop for food and beverage to locals and tourists alike.  The seller of the property has offered the company an adjacent building to use as an "overflow" for a banquet and catering facility, or as additional dining room seating, which the company will lease.

The third of the company's acquisitions is Blake's Inn in St. Petersburg, Florida.  Blake's Inn is a 50-unit hotel property directly off the cross-state major highway in St. Petersburg.  Also included in the acquisition is the freestanding restaurant adjacent to the property and "Tina's Angels," an adult-oriented entertainment complex adjacent to the hotel.  The company is also acquiring the adjacent land, which is pre-approved and zoned for a 17-unit apartment complex and three ground-floor retail businesses.  The company expects to derive significant revenue from this location.

Next, the company will release a business combination-related filing within the coming week to acquire the controlling shares in Boreal Water Collection, Inc. (Pink Sheets: BRWC).  The company will offer 1 share in the company for every 1,000 shares of Boreal.  Under the company's proposal, Boreal's stock will trade under the company's common Class C stock, which the company will register with the SEC following the acquisition.  The company's senior executive management has many sources to market Boreal's private-label water, including three major casinos in Las Vegas., Nevada.

The company Chief Executive Officer has been meeting with the Nevada State Banking Commission in order to form Developers Bank of Nevada, with respect to funding the company's real estate and commercial interests in Nevada.  The company expects to commence banking operations in Nevada – for its self-serving purposes – upon the approval of the Commission's final approval of its application.

The company will be required to acquire business, liquor, and occupancy licenses in the course of its acquisitions mentioned above, and, the company will be required to file the necessary disclosures with the Securities and Exchange Commission to effect the further registration of its shares.

BASED ON THE PRO FORMA INFORMATION PROVIDED BY THE SELLERS OF THE PROPERTIES, THE INCREASE IN INCOME TO BE RECEIVED WILL ACCELERATE THE PROGRESS OF THE COMPANY AND ENABLE PROMPT AND SUBSTANTIAL GROWTH OF THE COMPANY ALL OF WHICH WILL INURE TO THE BENEFIT OF THE COMPANY AND ITS STOCKHOLDERS.

SOURCE Distribution Management Services, Inc.