ONH .17 1-2500 R/S cashout fractional shares @ .23
secinfo.com
To Our Stockholders:
On behalf of the board of directors and management of Orion HealthCorp, Inc., I cordially invite you to attend a special meeting of the stockholders (the “Special Meeting”) to be held on November 29, 2007, at 8:00 a.m. local time, at 1805 Old Alabama Road, Roswell, Georgia 30076. The attached Notice of Special Meeting and Proxy Statement describe the formal business to be transacted at the Special Meeting.
At the Special Meeting stockholders will be asked to consider and approve a proposal to amend our certificate of incorporation to provide for a 1-for-2,500 reverse stock split of our Class A Common Stock, immediately followed by a 2,500-for-1 forward stock split of our Class A Common Stock.
If approved by our stockholders, the proposal is expected to result in termination of the registration of our Class A Common Stock under the federal securities laws and thereby eliminate the significant expense required to comply with the reporting and related requirements under those laws. The proposed transaction is expected to reduce the number of holders of record for our Class A Common Stock to fewer than 300 holders, thereby permitting us to file for termination of registration of our Class A Common Stock under the federal securities laws.
If approved at the Special Meeting, the transaction will affect the holders of our Class A Common Stock as follows:
• Holders of fewer than 2,500 shares of our Class A Common Stock on the date that the transaction occurs will cease to be stockholders of Orion HealthCorp, Inc. and will receive a cash payment from us in the amount of $0.23 per share, without interest, upon consummation of the transaction.
• Holders of 2,500 or more shares of our Class A Common Stock on the date that the transaction occurs will continue to remain stockholders of Orion HealthCorp, Inc. following consummation of the transaction.
Because we have a significant number of holders of our Class A Common Stock who own fewer than 2,500 shares, we expect that the number of holders of record of our Class A Common Stock will be reduced from approximately 311 to approximately 137, while the number of outstanding shares of our Class A Common Stock will decrease by only approximately 1.1%, a reduction of approximately 1,153,541 shares from the 105,504,032 shares outstanding as of October 1, 2007, the record date set to determine record holders entitled to vote at the special meeting.
After careful consideration, a special committee of our board of directors (the “Special Committee”) has concluded that the costs associated with being a Securities and Exchange Commission (“SEC”) reporting company are not justified by the benefits of being a public company. We estimate that we will save approximately $900,000 annually in compliance costs, as well as a considerable savings of time and attention of management. We believe that the cost-savings will be in our best interest and those of our stockholders who continue to own shares after consummation of the transaction. Although our Class A Common Stock will no longer be listed on the American Stock Exchange (“AMEX”) if the transaction is completed, we believe that our shares would be quoted on the “pink sheets” and our remaining stockholders would be able to trade their shares in the over-the-counter markets. In addition, the transaction would allow holders of fewer than 2,500 shares of our Class A Common Stock immediately before consummation of the transaction the opportunity to receive cash for their shares at a premium to the closing price of our Class A Common Stock on the last trading day before the public announcement of the approval of the transaction by the Special Committee, without having to pay brokerage commissions and other transaction costs. |
