Item 8.01. Other Events.
Upon the recommendation of a special committee (the "Special Committee") of the
Board of Directors, the Board of Directors of A. M. Castle & Co., a Maryland
corporation (the "Company"), has determined to effect a reverse split of the
Company's outstanding shares of common stock, par value $0.01 per share (the
"Common Stock"), pursuant to Section 2-309(e) of the Maryland General
Corporation Law (the "MGCL"), whereby each 10 shares of Common Stock issued and
outstanding as of the effective date of the reverse stock split will be combined
into one whole share of Common Stock (the "Reverse Stock Split"). No fractional
shares of Common Stock will be issued as a result of the Reverse Stock Split. In
lieu of issuing any fractional shares to any stockholder as a result of the
Reverse Stock Split, the Company will make, to any stockholder that would
otherwise hold a fractional share after giving effect to the Reverse Stock
Split, a cash payment in an amount equal to $0.70 multiplied by the number of
pre-split shares held by such stockholder with respect to which a fractional
share would be issued, which represents a premium of approximately 70% over the
20-day VWAP (volume weighted average price) of the Common Stock on the Best
Market tier of the OTC Markets Group, Inc. beginning on October 9, 2020 and
ending on October 28, 2020 (the "Cash Payment").
The primary purpose of the Reverse Stock Split is to reduce the number of record
holders of the Common Stock to fewer than 300, thereby allowing the Company to
terminate the registration of the Common Stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and suspend
its reporting obligations under Section 15(d) of the Exchange Act.
Under MGCL Section 2-309(e), the Reverse Stock Split will be effectuated by
filing an amendment to the charter of the Company (the "Charter") with the State
Department of Assessments and Taxation of Maryland, which the Company expects to
file no earlier than the twentieth day following the mailing of a disclosure
statement to stockholders in accordance with Rule 13e-3 of the Exchange Act.
Maryland law does not require the Company to obtain any vote or consent of our
stockholders to consummate the Reverse Stock Split. Accordingly, the Company is
not seeking stockholder approval for the Reverse Stock Split, or the subsequent
deregistration of its Common Stock or the suspension of the Company's duty to
file periodic reports and other information with the Securities and Exchange
Commission ("SEC"). Under Maryland law and the Charter, stockholders are not
entitled to dissenter's rights or any right of appraisal in connection with the
Reverse Stock Split.
Although the Board of Directors has authorized and approved the Reverse Stock
Split and subsequent termination of registration of the Common Stock and
suspension of the Company's duty to file periodic reports and other information
with the SEC under the Exchange Act, the Board of Directors reserves the right
to abandon, postpone or modify the foregoing for any reason, at any time before
they are consummated.
The transaction is a "going private" transaction under Section 13(e) of the
Exchange Act and the Company will file a Schedule 13E-3 with the SEC that
contains additional information about the transaction, which stockholders are
urged to read carefully and in its entirety. The Schedule 13E-3 will be
available at www.sec.gov.
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Cautionary Note Regarding Forward Looking Statements
The information contained in the press release attached to this Form 8-K and the
contents of this Form 8-K should be read in conjunction with our filings made
with the Securities and Exchange Commission. This Form 8-K contains
"forward-looking statements". Forward-looking statements are those that do not
relate solely to historical fact. Such forward-looking statements only speak as
of the date of this release and the Company assumes no obligation to update the
information included in this report. Such forward-looking statements reflect our
expectations, estimates or projections concerning our possible or assumed future
results of operations, including, but not limited to, descriptions of our
business strategy, and the benefits we expect to achieve from going private.
These statements often include words such as "believe," "expect," "anticipate,"
"intend," "predict," "plan," "should," or similar expressions. These statements
are not guarantees of performance or results, and they involve risks,
uncertainties, and assumptions. Although we believe that these forward-looking
statements are based on reasonable assumptions, there are many factors that
could affect our actual financial results or results of operations and could
cause actual results to differ materially from those in the forward-looking
statements. These factors include our ability to achieve the expected cost
savings and other benefits from the Reverse Stock Split, the impact of
volatility of metals prices, the cyclical and seasonal aspects of our business,
our ability to effectively manage inventory levels, the impact of our
substantial level of indebtedness, the impact of the novel Coronavirus
(COVID-19) pandemic on our financial results and business, as well as those risk
factors identified in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2019, and Part II Item 1A of quarterly report on Form 10-Q for the
quarter ended June 30, 2020. All future written and oral forward-looking
statements by us or persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements contained or referred to above.
Except as required by the federal securities laws, we do not have any obligation
or intention to release publicly any revisions to any forward-looking statements
to reflect events or circumstances in the future, to reflect the occurrence of
unanticipated events or for any other reason.
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