Trek Resources, Inc. Board of Directors Approves Reverse Stock Split as Part of Going Private Transaction
January 10 2005 - 7:34PM
PR Newswire (US)
Trek Resources, Inc. Board of Directors Approves Reverse Stock
Split as Part of Going Private Transaction DALLAS, Jan. 10
/PRNewswire-FirstCall/ -- Trek Resources, Inc. (OTC:TREK) (BULLETIN
BOARD: TREK) (the "Company") announced today that its Board of
Directors unanimously approved a 1-for-100 reverse stock split as
part of a going private transaction. The reverse stock split has
been structured to reduce the number of the Company's stockholders
such that the Company will qualify to terminate its registration as
a Securities and Exchange Commission ("SEC") reporting company. The
reverse stock split is subject to the approval of the Company's
stockholders and certain other conditions. There can be no
assurance that the reverse stock split will be consummated. While
stockholder approval is necessary, it is anticipated that shares
controlled directly or indirectly by Michael E. Montgomery, the
Company's Chairman, Chief Executive Officer and President, and his
mother, Faye C. Briggs, will be voted, by written consent in lieu
of a stockholder meeting, in favor of the reverse stock split. Mr.
Montgomery and his mother currently own approximately 59% of the
Company's outstanding common stock and 100% of the Company's
outstanding Series A convertible preferred stock. The reverse stock
split must be approved by (1) the holders of the Company's common
stock as a separate class and (2) the holders of the Company's
common stock and Series A convertible preferred stock voting
together as a single class. As proposed, the Company's common
stockholders will receive cash in the amount of $2.50 per pre-split
share in lieu of any fractional shares of post- split common stock
as a result of the reverse stock split. As a result, holders of
fewer than 100 shares of pre-split common stock at the time of the
reverse stock split will remain Trek stockholders after the reverse
stock split. Holders of more than 100 shares of pre-split common
stock will receive one share of new post-split common stock for
each 100 shares of pre-split common stock, plus cash in lieu of any
fractional share. The per share price represents a 14% premium over
the closing price of the Company's common stock on January 7, 2005.
Our board of directors feel that the $2.50 per pre-split share of
common stock to be received by holders of common stock who will
hold fractional shares immediately following the reverse stock
split is fair, from a financial point of view, to the stockholders.
Upon consummation of the reverse stock split, the Company intends
to terminate the registration of its common stock under the
Securities Exchange Act of 1934, as amended. The Company will then
cease filing reports with the SEC and the Company's common stock
will no longer trade on the OTC Bulletin Board. Mr. Montgomery
stated, "It is the opinion of Trek's Board of Directors that going
private via a reverse stock split is in the best interests of the
Company and its stockholders. Trek's common stock is not very
liquid in the public market and stockholders do not receive any
appreciable benefit from Trek being a public reporting company. In
today's business and regulatory environment, the costs and burdens
of being a public company far outweigh the benefits for a company
the size of Trek." The Company will mail to the Company's
stockholders an Information Statement that will contain important
information regarding the reverse stock split. Stockholders of the
Company are advised to read the materials in their entirety because
they will contain important information. Copies of the Information
Statement materials, and certain other documents filed by the
Company with the SEC relating to the reverse stock split, will be
available without charge at the SEC's website at
http://www.sec.gov/ or from the Company after they are mailed to
stockholders. Upon SEC approval, the Company will mail a copy of
the Information Statement to all stockholders of record. Trek is a
Dallas-based domestic oil and gas acquisition and production
company with oil and gas assets principally in Texas and Oklahoma.
More information about the Company may be found at the Company's
web site, http://www.trekresources.com/ or by contacting Mr.
Montgomery at Trek's headquarters, 4925 Greenville Avenue, Suite
955, Dallas, Texas 75206, telephone number (214) 373-0318, or in
the Company's filings with the Securities and Exchange Commission,
which may be obtained at the Commission's web site at
http://www.sec.gov/ . The announcement of the proposed reverse
stock split described above is not a solicitation of a proxy. The
reverse stock split is subject to the approval of the Company's
stockholders. The Company anticipates that shares controlled
directly or indirectly by Trek's directors, executive officers and
their affiliates will be voted, by written consent in lieu of a
stockholder meeting, in favor of the reverse stock split. The
reverse stock split is also subject to, among other things, the
receipt of all necessary regulatory approvals. The Company notes
that statements contained in this news release that are not based
on historical facts are forward-looking statements and, as such,
are subject to uncertainties and risks that could cause actual
results to differ materially from those projected or implied by
such statements. These risks, contingencies and uncertainties, many
of which are beyond the Company's control, include those risk
factors that are set forth in the Company's Annual Report on Form
10-K for the year ended September 30, 2004 and the Company's
Reports on Form 8-K, on file with the U.S. Securities and Exchange
Commission. DATASOURCE: Trek Resources, Inc. CONTACT: Michael E.
Montgomery of Trek Resources, Inc., +1-214-373-0318 Web site:
http://www.sec.gov/ Web site: http://www.trekresources.com/
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