Current Price – $0.2
Offer Price – $0.5 (for holders of less than 200 shares)
Upside – 150% or $60 for holders of 199 shares
Expiration date – TBD
Trading Strategy:
Buy 199 shares of FCRM and wait for the reverse-split. Caution, this security is very iliquid.
Summary:
he Board of Directors of Franklin Credit Management Corporation have approved amendments to our Certificate of Incorporation to effect a Reverse/Forward Split of the Company’s $0.01 par value common stock, at an exchange ratio of 1-for-200 shares of outstanding Common Stock, immediately followed by a forward stock split of the Company’s outstanding Common Stock, at an exchange ratio of 200-for-1 shares of outstanding Common Stock. Holders of record of less than one share as a result of the Reverse Split will be cashed out at the rate of $0.50 per pre-split share. Holders of record of at least one share as a result of the Reverse Split will not be entitled to receive any cash payment.
Although the Reverse/Forward Split has been approved by the holders of the requisite majority of the shares of our Common Stock, the Board reserves the right, in its discretion, to abandon the Reverse/Forward Split before it becomes effective, if it determines that abandoning the Reverse/Forward Split is in the best interests of the Company or its stockholders.
The size of the Reverse/Forward Split and the fact that a negligible percentage of outstanding Common Stock of the Company will be cashed out (as of October 7, 2014, approximately 12,491 shares out of 10,035,993 issued and outstanding shares).
Transaction already approved by Shareholders:
Although the Reverse/Forward Split has been approved by the holders of the requisite majority of the shares of our Common Stock, the Board reserves the right, in its discretion, to abandon the Reverse/Forward Split before it becomes effective, if it determines that abandoning the Reverse/Forward Split is in the best interests of the Company or its stockholders.
Source of Funds:
We estimate that we will pay up to approximately $6,246 to cash out holders of record of less than one share as a result of the Reverse Split. In addition, we anticipate incurring approximately $30,000 in advisory, legal, financial, accounting and other fees and costs in connection with the Reverse/Forward Split. We currently have the financial resources to complete the Reverse/Forward Split.