Exhibit 10.1

KUHLMAN COMPANY, INC.

 

 I. Investor Relations Contact:
    James Palczynski or Joe Teklits
    Integrated Corporate Relations, Inc.
    (203) 682-8200
      Company Contact: 
    Scott Kuhlman
    Kuhlman Company, Inc.
    (612) 767-2401

 

II.  KUHLMAN COMPANY SECURES $1.75 MILLION OF NEW FINANCING

-- Company to Shift Management Responsibilities --
 
 
Minneapolis, Minnesota - September 25, 2006 - Kuhlman Company, Inc. (AMEX:KUL),
a provider of European-inspired, tailored clothing for men and women, today
reported that it has closed on a $1.75 Million offering of convertible
debentures with an investment group led by Cornell Capital. Under the terms of
the financing, $1 million of the financing, net of transaction expenses, was
funded at closing; the remaining $750,000 of the financing, net of transaction
expenses, will be provided when the Company obtains shareholder approval of the
transaction. A Special Shareholder Meeting in connection with the financing will
be held in early November.
 
The three-year convertible debentures carry a coupon rate of eight percent
(8.0%). Additionally, for the first 18 months under the terms of the financing,
Cornell Capital shall retain a right of first refusal for any additional
financing the Company may pursue. As part of the financing, founders Scott and
Susan Kuhlman, and Board Member Jon Sabes, provided 2.5 million shares and 500
thousand shares, respectively, of personally-held Company stock into an escrow
account with Cornell Capital as collateral for the financing. Additional future
financing and/or substantial restructuring of the Company’s current payables and
certain other obligations will be required to ensure the viability of the
Company.
 
Scott Kuhlman, commented, “We are very pleased with the ongoing support we have
received from the investment community. We remain confident that, if we can
address current cash flow concerns and focus on our most profitable stores, we
have a unique and compelling opportunity to build a national chain of specialty
retail locations and a vibrant wholesale business that serves both the fashion
and value needs of today’s discriminating consumer.”
 
 
 

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The Company also announced that Luis Padilla has vacated his position as Chief
Executive Officer to pursue other career opportunities. He will remain a member
of the Board of the Directors and continue as an important strategic and
operational consultant to the Company. Scott Kuhlman, the Company’s founder,
will resume his role as Chief Executive Officer. Additionally, the Company
announced that it has retained the firm of Adams, Monahan and Sankovitz, LLP,
which will assist the Company’s finance department in structuring an effective
solution to and management of its store locations, payables and cash flows.  
 
Mr. Padilla commented, “I am proud to have contributed to Kuhlman’s development
and remain convinced that this concept and product line have a tremendous
opportunity. I am looking forward to staying involved in the development of the
Company as a member of the Board of Directors.”
 
  Scott Kuhlman, Chief Executive Officer, said, “We are deeply grateful to Luis
for his contributions. We have benefited from his expertise and advice in our
operations, product line development, and in our financing activities. His
leadership, which we are pleased will continue with his role as a member of our
board, has helped prepare us for the next stage of our strategy, in which we
will focus on cash-flow management and operational efficiency.”
 
About Kuhlman Company, Inc.
Kuhlman is a specialty retailer and wholesale provider of branded men's and
women's apparel, through company-owned retail stores and under private labels
through other large retailers. Kuhlman opened its first retail store in July
2003 and now operates 32 retail stores in 15 states and the District of
Columbia. Kuhlman has approximately 150 employees and its corporate office is
located in Minneapolis, MN. Additional information regarding Kuhlman and its
apparel, and store locations can be found at http://www.kuhlmancompany.com.

III.  Forward-Looking Statements
Some of the statements made in this release are forward-looking statements.
These forward-looking statements are based upon our current expectations and
projections about future events and generally relate to our plans, objectives
and expectations for our business. Although our management believes that the
plans and objectives expressed in these forward-looking statements are
reasonable, the outcome of su2ch plans, objectives and expectations involve
risks and uncertainties and our actual future results may be materially
different from the plans, objectives and expectations expressed in these
forward-looking statements. Specific factors that might cause actual results to
differ from our current expectations include, but are not limited to:

 
 

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·  
our ability to anticipate and identify style trends

·  
our ability to identify and secure favorable retail locations

·  
our ability to establish successful vendor relationships and obtain quality
products on a timely basis

·  
our ability to hire and develop successful retail salespeople and managers

·  
our ability to identify and develop additional wholesale relationships

·  
our ability to compete successfully against other retailers and market our
styles in a profitable manner, and

·  
other factors expressed in our periodic filings with the United States
Securities and Exchange Commission, specifically including those risk factors
contained in the Company’s current report on Form 8-K filed on June 16, 2005.

For the foregoing reasons, readers and investors are cautioned that there also
can be no assurance that the outcomes expressed in our forward-looking
statements included in release will prove to be accurate. In light of the
significant uncertainties inherent in such forward-looking statements, the
inclusion of such information should not be regarded as a representation or
warranty by the Company or any other person that the Company’s objectives and
plans will be achieved in any specified time frame, if at all. The Company does
not undertake any obligation to update any forward-looking statements or to
announce revisions to any forward-looking statements.
 

 
 

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