The firm announced Monday that it plans to reduce its number of shareholders of record to approximately 210, allowing it to suspend its reporting obligations to the Securities and Exchange Commission.
This was done by way of a simultaneous 1-for-200 reverse stock split and 200-for-1 forward stock split of its common stock at the close of business on Monday.
As a result of the maneuver, registered shareholders previously owning fewer than 200 shares of common stock gained the right to receive 75 cents in cash per pre-split share.
Phoenix also expects to repurchase approximately 12,800 shares for $9,600. Ultimately the company “expects to terminate the registration of its common stock under federal securities laws as soon as practicable,” it said in a statement.
The company will also file a Form 25 with the SEC to voluntarily delist its shares from the NYSE’s AMEX “as soon as possible after completion of the stock split.” The delisting will then take effect 10 days after the filing.
“This reverse/forward split [is] an important step toward our goal of simplifying the operating structure of the company and reducing overhead costs significantly,” said Jim Riedman, who was appointed the firm’s CEO and president four months ago. “We believe that we initiated this process at an appropriate time and that it is in the best interest of our stockholders and the company’s future growth.”
Phoenix’s shares will soon trade on the Pink OTC Markets, and the firm said it “looks forward to … providing the shareholders with financial information relating to the fiscal year ended Jan. 1, 2011, in the near future.”