1. Has EMRISE Corporation (“EMRISE” or the “Company”) dissolved?
A. Yes. At a special meeting of stockholders held on June 25, 2015 (the “Special Meeting”), EMRISE stockholders approved the Company’s voluntary Plan of Dissolution (the “Plan”). At the Special Meeting the stockholders also approved the sale of EMRISE’s Electronic Devices business unit, the largest of its business units, to an affiliate of Data Device Corporation (DDC). That sale closed on June 30, 2015. On July 1, 2015, the Company filed a Certificate of Dissolution with the Secretary of State of the State of Delaware, dissolving the Company as a legal entity. Upon the filing of the Certificate of Dissolution, the Company ceased all of its business activities, except as necessary, appropriate or desirable to effect a sale of its remaining assets, which at that time included the sale of CXR Anderson-Jacobson (“CXR-AJ”), its communications equipment business unit located in France. CXR-AJ was subsequently sold in February 2016. (Please see Question 7)
In addition, as of the close of business on July 1, 2015, the Company’s common stock ceased trading on the OTC marketplace’s OTCQB and its stock transfer books were closed.
2. Under the terms of the Plan can stockholders expect to receive any distribution of funds from the sale of the Company’s assets?
A. Under the terms of the Plan, EMRISE has been collecting the funds from the sale of its assets and paying all known liabilities in order to maximize the dollar amount of the distributions to stockholders of record as of the close of business on July 7, 2015.
3. How much was the initial distribution and who was entitled to this distribution?
A. EMRISE made an initial distribution of $0.75 per share to stockholders of record as of the close of business on July 1, 2015. On December 9, 2015, the Company announced the record date was changed from July 1, 2015 to July 7, 2015 to recognize those share transactions that had been initiated by July 1, 2015 but had not yet been settled and recorded in the books of the Company’s transfer agent until a few days after that date.
4. When did EMRISE make the aforementioned initial distribution?
A. The Company made the initial distribution to stockholders of record as of the close of business on July 1, 2015, on December 1, 2015. As referenced in the answer to Question 2, the Company changed the record date to July 7, 2015.
5. Why was the initial distribution less than the $0.95 to $1.00 range originally anticipated to be distributed to stockholders from the proceeds of the sale of the Company's Electronic Devices business?
A. Prior to the sale of CXR-AJ in February 2016, the Company determined it needed to increased its reserve to satisfy and discharge all known, potential, or contingent debts, obligations, and liabilities of the Company by approximately $3.6 million to cover additional liabilities in the event CXR-AJ was not sold.
Increasing this reserve had the effect of reducing the previously anticipated initial liquidation distribution to EMRISE stockholders from a range of $0.95 to $1.00 per share to a revised initial distribution of $0.75 per share.
It was the Company’s expectation at that time, that if a sale of CXR-AJ could be completed in the near term, the Company would make another distribution to stockholders in an amount, that when added to the initial distribution, would result in stockholders receiving at least $0.95 to $1.00 per share.
6. After the initial distribution was made, what would the balance of the Company’s reserve have been to satisfy and discharge all known, potential, or contingent debts, obligations, and liabilities of the Company?
A. Immediately after the initial distribution, the size of the Company’s reserve was estimated to be approximately $6.8 million, of which approximately $3.6 million was held to cover any additional liabilities arising in the event that a sale of CXR- AJ could not be achieved and $3.2 million was expected to be used to pay all liabilities known to the Company as of November 16, 2015.
7. What is the status of the Company’s efforts to sell CXR-AJ in France?
A. Subsequent to the Company's pursuit of strategic alternatives for CXR-AJ, including discussions with many parties concerning the sale of that business, on February 18, 2016, EMRISE completed the sale of all of the issued and outstanding stock of CXR-AJ to Carmine T. and Georgeann Oliva (the “Transaction”). Full details of the Transaction can be found by referring to the news release disseminated on February 18, 2016, that announced the sale of CXR-AJ, and the Form 8-K filed with the Securities and Exchange Commission (SEC) on February 22, 2016. The Form 8-K includes copies of the Stock Purchase Agreement, the Promissory Note, and the news release all dated February 18, 2016.
8. After the sale of CXR-AJ, when was the second distribution made to the Company’s stockholders and what was the amount of that distribution?
A. EMRISE instructed its paying agent, VStock Transfer, LLC, to begin the process of sending the second liquidation distribution on April 19, 2016, to its stockholders of record as of the close of business on July 7, 2015. The amount of the second liquidation distribution was $0.36 per share, or approximately $3.9 million in the aggregate (the “Distribution”).
The Distribution included: the net cash realized by the Company at the close of the Transaction, after deducting investment banking fees, legal fees and other associated costs; the release of certain escrow funds held to secure any shortfall in working capital as of the closing of the sale of the Company’s Electronic Devices business to DDC on June 30, 2015; and the release of the additional reserve the Company announced on November 16, 2015, to cover liabilities in the event CXR-AJ was not sold.
The Distribution was made in connection with the Company’s previously announced Plan. When paid, the Distribution increased the total amount of the two liquidation distributions paid to stockholders to date under the Plan, to $1.11 per share, or an aggregate total of $12.1 million.
9. Will there be any subsequent distribution of assets to stockholders?
A. EMRISE anticipates making a final liquidation distribution to its stockholders; however, if made, the timing and amount of a subsequent distribution will depend on many factors including the receipt of further monies in connection with the CXR-AJ Transaction; the amount of funds released from the $900,000 of escrow funds held to secure certain indemnification obligations of the Company under the purchase agreement related to the sale of the Company’s Electronic Devices business unit; the final determination and the payment of State and Federal taxes in the U.S.; and other Dissolution Costs. A further update on any subsequent distribution should occur in late 2016.
10. Who is eligible for any subsequent distribution of the Company’s assets?
A. Only holders of record of the Company’s common stock as of the close of business on July 7, 2015, are eligible to receive any distribution of the Company’s assets, in connection with the Company’s Plan.
11. Can I still transfer my shares of common stock?
A. In connection with the Company’s filing of a Certificate of Dissolution, the Company ceased trading on the OTC marketplace’s OTCQB, closed its stock transfer books, and discontinued recording transfers of the Company’s common stock, as of the close of business on July 7, 2015. Accordingly, certificates representing shares of common stock of the Company are not assignable or transferable on the books of the Company except by will, intestate succession, or operation of law.
12. I have changed my name since July 1, 2015, what should I do?
A. You should notify our paying agent, VStock Transfer, of your new name in order that they can amend their records. The contact information for VStock Transfer follows:
13. I have changed my address, what should I do?
A. You should notify our paying agent, VStock Transfer, of your new address so they can amend their records. To facilitate that process we have included below a link to a PDF file that contains the Address Change Form. You should download and print the form, fill it out, sign it and send it to VStock Transfer, attention Allison Niccolls. You may send the form by fax or mail the form to VStock Transfer at the address at the top of the form. If any subsequent distribution is ever made to stockholders, the Address Change Form would need to be at VStock Transfer well before the date of any such distribution.
To access and download the Address Change Form, please click on the box below or the adjacent link:
In order to view and print this PDF file, you will need to have the appropriate Adobe Reader plug-in installed on your computer or tablet. If you don’t have the plug-in installed on your system, click on the box below or the adjacent link to obtain a free copy of the Adobe Reader plug-in from the Adobe website:
If you prefer, you may also contact Rene Caron or Nathan Abler of DresnerAllenCaron at firstname.lastname@example.org or email@example.com or call (949) 474-4300 and they will e-mail or fax you a copy of the form.
14. I hold shares of the Company’s common stock because the owner of the stock as of July 1, 2015 has deceased and the shares were bequeathed to me. Am I eligible for any distribution of assets?
A. Under those circumstances, you should contact our paying agent, VStock Transfer. You will need to provide appropriate documentation in order for VStock Transfer to record the transfer.
15. My broker tells me that the shares of EMRISE common stock that I own apparently have no value. My broker said that when entering the stock symbol EMRI in an attempt to get a price quote on the OTC marketplace’s OTCQB, EMRISE is not listed. Also, when entering the stock symbol EMRI on the Nasdaq website or Yahoo Finance website there is no current price or volume indicated for the stock and the only price is a previous close. Is my broker correct in saying that the EMRISE shares of stock have no value?
A. No. As previously disclosed, on July 1, 2015, the Company dissolved as a legal entity. At such time, EMRISE’s stock ceased trading on the OTC marketplace’s OTCQB, the stock transfer books were closed, and recording transfers of the Company’s common stock was discontinued, as of the close of business on July 1, 2015. However, under the Plan, stockholders of record as of the close of business on July 7, 2015, have been sent to date in two separate liquidation distributions for an aggregate total of $1.11 per share, or $12.1 million.
16. What if I have additional questions regarding EMRISE, the Plan of Dissolution or my shares of EMRISE common stock?
A. You may contact Rene Caron or Nathan Abler of DresnerAllenCaron at firstname.lastname@example.org or email@example.com or call them at (949) 474-4300. You may also contact the Company’s paying agent, VStock Transfer LLC, at the contact number above.
17. When was EMRISE incorporated?
A. EMRISE was incorporated in the State of Delaware on July 14, 1989.
18. How many people are employed at EMRISE?
A. In order to minimize costs and therefore maximize the return to shareholders EMRISE has taken all possible steps to reduce employee and other costs. EMRISE now has no employees and, as of March 19, 2016, the size of its Board of Directors was reduced from three Directors to one, Mr. Frank P. Russomanno who is continuing to serve as the Company’s Executive Director.
19. Where can I contact the Company?
A. EMRISE can be contacted via regular mail at:
20. What is the trading symbol for EMRISE’s common stock?
A. The Company’s common stock no longer trades; however, when the stock traded on the OTCQB, the trading symbol was EMRI
21. When does EMRISE’s year end?
A. EMRISE’s fiscal year runs from January 1 to December 31.
22. How can I replace a stock certificate that has been lost or damaged?
A. Contact our Paying/Transfer Agent, VStock Transfer, and refer to Cusip # 29246J200.
23. How can I get my old certificates exchanged for new ones?
A. If you have a certificate in a company that you think was acquired by EMRISE and/or if you have certificates for stock in EMRISE acquired prior to the November 2008 reverse stock split, please contact our Paying/Transfer Agent, VStock Transfer, and refer to Cusip # 29246J200.
24. How can I find out how much I paid for my shares when I purchased them?
A. Your purchase will have been transacted by a broker, or by you through an online brokerage firm, or an attorney, etc. You should locate the original paperwork or contact that broker, brokerage firm or attorney to ascertain the price you paid. EMRISE does not have records of individual stockholder transactions.