Now, what does this mean?:
Calton, Inc. Announces Recapitalization and Proposed Spin-Off of Shell Corporation
RED BANK, N.J.--(BUSINESS WIRE)--May 19, 2000--Calton, Inc. (AMEX:CN) announced today that its Board of Directors has approved a two-step recapitalization designed to reduce the number of shareholders who own fewer than twenty-five shares. Effective at the close of business on May 31, 2000, the Company will effect a one-for-twenty-five share combination or "reverse split" of the Company's Common Stock. Contemporaneous with, but after giving effect to the share combination, the Company will effect a five-for-one split of the Common Stock. As a result of the recapitalization, each twenty-five shares of Common Stock outstanding will be combined into one share of Common Stock and the resulting share will be split into five shares. All fractional shares that result from the share combination will be repurchased by the Company for cash at a price based upon the closing market value of the Common Stock on May 31, 2000.
Calton is undertaking the recapitalization due to the large number of its shareholders who own less than twenty-five shares. As a result of the recapitalization, shareholders who own less than twenty-five shares will have their interest in Calton repurchased by the Company. The reduction in the number of shareholders will reduce the costs associated with communications with shareholders and shareholder meetings.
The Company also announced that it plans to file a registration statement with the Securities and Exchange Commission relating to a proposed spin-off to its shareholders of a 15% interest in Calton Acquisition Corp., a wholly-owned subsidiary which was recently formed to pursue a merger or other business combination with an operating business. Calton has made a $250,000 equity contribution and a $750,000 loan to Calton Acquisition Corp., which has no other assets and which has not conducted any business.
It is anticipated that each Calton shareholder will receive one share of Calton Acquisition Corp. Common Stock for each share of Calton, Inc. Common Stock held on the record date for the distribution, which has not yet been determined. The spin-off is being effected pursuant to Calton's strategic plan to enhance shareholder value through the acquisition of, or combination with, one or more operating businesses. The Company believes that the creation of a separate, publicly traded Shell corporation may facilitate its ability to attract potential business acquisition or combination candidates.
Certain information included in this release and Company filings (collectively, the "SEC filings") under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (as well as information communicated orally or in writing between the dates of such SEC filings) contains or may contain forward looking information that is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from expected results. Among these risks, trends and uncertainties are matters relating to national and local economic conditions, potential adverse effects of acquisitions, the ability of the Company to identify suitable acquisition candidates and the effect of government regulation on the Company.
CONTACT:
Calton, Inc.
Anthony J. Caldarone
Chairman, President and Chief Executive Officer
732/212-1280
Company website: www.caltoninc.com
KEYWORD: NEW JERSEY
BW1401 MAY 19,2000
15:12 PACIFIC
18:12 EASTERN |
