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Nov. 5, 2012 /PRNewswire/ -- Advant-e Corporation (OTCQB: ADVC) today announced that its Board of Directors and a majority of its outstanding shares have authorized a 1-for-10,000 reverse stock split followed by a 1,000-for-1 forward stock split and a
$2,000,000 share repurchase program. The Board is also considering payment of a potential special cash dividend pending the results of the stock splits, the share repurchase program and the Company's cash flow. These corporate actions are being undertaken in preparation to voluntarily suspend the Company's obligation to file periodic reports with the Securities and Exchange Commission.
The Board approved these actions and the decision to voluntarily suspend its public reporting obligations due to many factors, including the Company's size and the lack of sufficient liquidity in the market for its common stock, but also the high cost of complying with SEC rules, regulations and procedures and eliminating the requirement to disclose certain competitive business information. The Company intends to file Form 15 with the SEC as soon as practical after the consummation of the reverse stock split, regardless of the outcome of the stock repurchase program, to complete the voluntary suspension of its public reporting obligations.
The Board and a majority of the Company's outstanding shares have approved amendments to the Company's certificate of incorporation in connection with the reverse stock split and the forward stock split. Shareholders who would otherwise hold a fractional share will instead receive a cash payment of
$0.27 per share in lieu of a fractional share. The Company estimates the cost of purchasing the fractional shares from its shareholders at approximately
$365,000, which represents approximately 1,300,000 pre-reverse stock split shares. The date of the reverse and forward stock splits will be announced at a later date pending regulatory compliance. The Company expects to file a Schedule 14C Information Statement with the SEC further describing the reverse and forward stock splits shortly. The Board of Directors has reserved the right to abandon the proposed reverse and forward stock split at any time prior to their effective date if it believes them to no longer be in the best interest of the Company or its shareholders.
Following the reverse and forward stock splits, there will be an estimated 75 remaining shareholders of record. Although the Company currently has fewer than 500 shareholders of record, the purpose of this action is to provide small shareholders with a liquidity event whereby their shares will be converted to cash at a 4.11% premium based on the average closing price for the 30 trading days prior to this announcement and a 7.9% premium based on the average closing price for the 90 trading days prior to this announcement.