Question:

Why is the Affinity Group's Steve Adams' name popping up in the financial reports on Holiday RV Superstores, Inc? Is there an impending marriage here?

Holiday RV Superstores, Inc., the publicly traded chain of RV dealerships doing business under the trade name, Recreation USA, recently announced Recreation USA's successful "initial round of private equity placement of $1.5 million in an offering of up to $3.5 million through the sale of units consisting of convertible preferred stock and warrants. The proceeds of the private placement will be used for working capital and general corporate purposes. "

So far so good. But in the next paragraph of the news release, I started getting lost:

"The private placement is for up to 350 units for up to $3.5 million in gross proceeds. Each unit consists of 100 shares of Series A Preferred Stock and a warrant to purchase 5,000 shares of common stock. The Series A Preferred Stock is being issued in two sub-series and the warrants are not presently exercisable pending the approval of the convertability and voting rights of one of the sub-series of the Series A Preferred Stock and of the exercisability of the warrants."

Upon rereading this paragraph a few times, my understanding was not significantly enhanced, so I thought looking for the background filing of this action with the SEC would enlighten me ­ it did. But not so much to clear up my understanding of what all this means other than Holiday RV Superstores is trying to raise operating capital and that they were satisfied with their progress.

My revelation was the name Stephen Adams. In its 8K filing with the SEC, there's a section on Warrants:

(Quote)

No. A-1-1 Dated: As of January 8, 2002

WARRANT

HOLIDAY RV SUPERSTORES, INC.

This Warrant certifies that The Stephen Adams Living Trust UTA dated September 15, 1997, or registered assigns, is the registered holder of a warrant (this Warrant) to purchase 750,000 shares (as adjusted from time to time hereunder, the Exercise Shares) of common stock, par value $.01 per share (the Common Stock), of Holiday RV Superstores, Inc., a Delaware corporation (the Company), at an exercise price per share equal to $.50 (the Exercise Price). This Warrant will not be exercisable until the Company has received stockholder approval to issue this Warrant as required under Nasdaq Marketplace Rule 4350(i)(1)(D).

(end quote)

And is this Stephen Adams the same Stephen Adams that heads up the Affinity Group? Upon checking with the PR agency for Holiday RV Super-stores, we learned that indeed, it's the same Steve Adams.

By way of background, Trailer Life and all the associated publications, as well as Camping World, Woodalls Publishing, the Good Sam Club and a variety of other entities are owned by the Affinity Group, Inc., (AGI). AGI is owned by Affinity Holdings. Inc. There is one share of stock in Affinity Group Holding, Inc., and Stephen Adams owns that share.

In the Warrant it states "This Warrant will not be exercisable until the Company has received stockholder approval"

In the news release, Holiday RV Superstores said, "Recreation USA anticipates that a majority of its stockholders will provide the necessary approval promptly and that following the distribution of an information statement to all stockholders the conversion, voting and exercise features of the securities will be uniform. If Recreation USA's stockholders approve the conversion terms, each share of Series A Preferred Stock will be convertible into shares of common stock at an initial conversion price of $0.50 per share, for a total of 7 million shares, if all of the units are sold. The shares of Sub-Series A-1 Preferred stock issued at the initial closing are initially convertible into 754,800 shares of common stock."

So the question then becomes, why is Steve Adams investing in Holiday RV Superstores? Love him or hate him, everyone must agree that Steve Adams is a shrewd and talented businessman. What he has built since acquiring TL Enterprises, Inc., has been nothing short of phenomenal.

So is this simply an investment or is there more to the story? Holiday RV Superstores does not seem to be the most financially sound company in the industry and most of the top management that was in place following the acquisition has either resigned or been fired; so it makes little sense that anyone investing would be expecting a good return on that investment. So why is Adams investing?

I called on the PR agency and asked for some clarification about this warrant and what it meant, and the agency said it would arrange an interview with Holiday RV Superstores' CFO. It seemed as though the interview was all set, but after I mentioned the name Steve Adams, I never heard back from them ­ at least by press time.

Questions abound, but answers do not. For example, will we be seeing Camping World Stores in all of the Recreation USA outlets across the country? Will we be seeing the Recreation USA signs come down and Camping World signs going up?

For this writer, it's all quite intriguing. On one hand, this could all mean nothing, but on another, we may be seeing the beginning embers of a fire that could ultimately have a dramatic affect on the RV industry ­ and depending on where you are sitting, not necessarily a positive affect.