Spectrum Group International, Inc. (OTCQB:SPGZ) (“SGI” or the “Company”) today announced that it has filed a registration statement with the Securities and Exchange Commission (“SEC”) relating to the proposed distribution (or spinoff) by SGI to its shareholders of all of the outstanding shares of common stock of A-Mark Precious Metals, Inc. (“A-Mark”). A-Mark is currently a wholly-owned subsidiary of the Company.
SGI intends to distribute all of the A-Mark common stock on a pro rata basis to holders of SGI common stock, and A-Mark will thereafter be a publicly traded company independent from SGI. The distribution ratio, record date and distribution date, among other things, have not yet been determined. Shareholders of SGI will continue to own their SGI common stock following the distribution, which at that point will include the remaining businesses of SGI. SGI expects that the spinoff will be tax-free to SGI shareholders for U.S. federal income tax purposes, except for any cash received in lieu of fractional shares.
If the spinoff is consummated, SGI intends thereafter to reduce the number of record holders of its common stock to fewer than 300 through a reverse stock split and to terminate the registration of its common stock under the Securities Exchange Act, with the result that SGI will no longer be required to file periodic and other reports with the SEC. It is expected that SGI common stock will continue to be quoted on the OTCQB under the symbol “SPGZ” following the deregistration of its shares under the Securities Exchange Act. The reverse stock split ratio and the consideration for the resulting fractional shares have not yet been determined.
Greg Roberts, President and CEO of SGI, commented, “We expect that the spinoff will provide significant benefits to the shareholders, employees and customers of both companies by enabling management of each company to explore growth opportunities and execute strategic business plans best suited to their respective businesses. Management of each company will also be better able to develop and implement compensation policies that reflect the strategies, policies and business characteristics of the respective companies, and to align the interests of management with the interests of shareholders. In addition, we expect that the spinoff will increase investor understanding of A-Mark and its market position within its industry, and allow investors to make independent decisions with respect to each of SGI and A-Mark based on their different business models, strategies and industries. Finally, the spinoff will provide A-Mark with its own publicly traded equity currency for pursuing acquisitions tailored to its distinct business and business strategies.”
Mr. Roberts continued, “Our board has determined that the costs to SGI of continuing as an SEC reporting company following the spinoff of A-Mark outweigh the benefits and, thus, that it will no longer in the best interests of the Company or the best interests of our stockholders for us to remain an SEC reporting company. If approved by the SGI shareholders, the reverse stock split will enable us to terminate the registration of our common stock under the Securities Exchange Act if various other conditions are met. We anticipate that the reverse stock split will result in material cost savings to SGI beginning in 2014, while also allowing SGI management to focus on operating the business and growing stockholder value.”
The spinoff and the reverse stock split are subject to a number of significant conditions and there can be no assurance that either transaction will be consummated.
Information regarding the spinoff, the reverse stock split, the deregistration of the SGI shares and related matters is set forth in A-Mark’s registration statement on Form S-1, as filed with the Securities and Exchange Commission on November 12, 2013. The Company intends to file a proxy statement relating to the proposed reverse stock split shortly.
About Spectrum Group International, Inc.
Spectrum Group International, Inc. (together with its subsidiaries, “we,” the “Company” or “SGI”) is a global trading and collectibles network. We are a trader of precious metals and an auctioneer of coins and wine, serving both collectors and dealers. We are also a merchant/dealer of certain collectibles. Our collectibles offerings span the price spectrum from modest to ultra-high end. Furthermore, we offer loans to coin dealers, collectors and investors backed by their precious metals, rare coins, and other collectibles as collateral.
Our Trading business is conducted through A-Mark Precious Metals, Inc. (“A-Mark”) and its subsidiaries. A-Mark is a full-service precious metal trading company, and an official distributor for many government mints throughout the world. A-Mark products include gold, silver, platinum and palladium for storage and delivery in the form of coins, bars, wafers and grain, and our services include financing, leasing, consignment, hedging and various customized financial programs. A-Mark’s subsidiary, Collateral Finance Corporation, provides financing on a wide array of bullion and numismatic products.
Our Collectibles business operates as an integrated network of leading companies concentrating on numismatic (coins) and rare and fine vintage wine. We have offices and auction houses in North America, Europe and Asia. In addition to traditional live auctions, we also conduct Internet and telephone auctions.
Spectrum Group’s Collectibles companies in the numismatics field include Stack’s Bowers Numismatics LLC (dba Stack’s Bowers Galleries), a rare coin and currency auction house, and Spectrum Wine Auctions, all based in Irvine, California.
SAFE HARBOR STATEMENT
Statements in this press release that relate to future plans, objectives, expectations, performance, events and the like are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and the Securities Exchange Act of 1934. Future events, risks and uncertainties, individually or in the aggregate, could cause actual results to differ materially from those expressed or implied in these statements. Factors that could cause actual results to differ are identified in our public filings with the Securities and Exchange Commission (SEC), and include the fact that we have disclosed that you should not rely upon our previously published financial statements and the fact that we have not filed all of our reports required by the Securities Exchange Act of 1934. More information about factors that could affect our business and financial results included in our public filings with the SEC, which are available on the SEC’s website located at www.sec.gov.
The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
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