MIAMI, Sept. 28, 2020 (GLOBE NEWSWIRE) -- Omega Commercial Finance Corporation (OCFN) is hereby providing shareholders and the investment community with an update of its capital restructuring, as a result of the Company having become a non-reporting public company in October 2018..
Becoming a non-reporting public company afforded OCFN the opportunity to restructure the Company’s capital structure and address massive derivative debt that was cultivated overtime by “Bad Actors,” which is pervasive within the over-the-counter market. The derivative debt originated from various holders of promissory notes of which OCFN issued in the period following the 2008 credit crisis to sustain operations and stay afloat during a period where investment bankers where not readily providing capital for over-the-counter companies and instead focusing on top tier public companies trading on national securities exchanges.
Consequently, when the debt from the promissory notes were due, the Company strategically felt it was best to allow the convertible feature within the structure of the notes to repay the debt with the Company’s common stock (i.e., using “equity” by having the note holder convert the debt into common stock to repay the note instead of cash). Unfortunately, these “bad actors” noteholders used the guise of the convertible shares feature to sustain their cost basis and convert their notes into massive amounts of OCFN’s common stock and profit from the stock with no intention of helping support liquidity in the Company. In other words, the issuer of the promissory notes would continue to convert the debt into shares at a lower and lower price to obtain the full amount of the note due, which put OCFN’s shares in what is called a “death spiral”. In short, this caused massive dilution for the Company’s “friendly” shareholders and “knee capped” OCFN from being able to utilize the capital markets for raising capital the traditional way.
Learning from this experience, to better position OCFN for defense against these “bad actors” and to attract new investments and/or new traditional investment banking relationships, the Company has also been aggressively interviewing strong candidates to appoint as directors, officers, and advisory board members. Specifically, we have been seeking officers oriented with strong skill sets in the management, strategic planning, and corporate governance of a public holding company. This entails possessing accomplished and result-driven expertise in commercial real estate lending, operations, construction, project management and strategic planning as an executive officer with broad based knowledge and success building and leading effective strategies for the select management of a future portfolio consisting of various subsidiary companies all under the umbrella of OCFN. Additionally, the Company is seeking board of directors members who have an expertise in overseeing teams of professionals and are able to evaluate the teams implementation of effective strategies to improve top line revenue while meeting operational and revenue targets.
To summarize, and clarify the current status of OCFN, the Company still remains a public entity operating as a financial service holding company. However, its stock is no longer registered under nor is the company subject to the reporting requirements of the Securities Exchange Act of 1934, as amended. With that said, OCFN intends to regain full reporting status, by filing a Form 10 with the SEC, which it anticipates accomplishing by mid-2021.
